Japanese automakers experienced a significant boost in their stock prices following the announcement that the U.S. has reduced its auto tariffs from 25% to 15%. Honda's stock surged over 8%, Toyota saw a nearly 12% increase, Nissan rose over 8%, Mazda skyrocketed more than 17%, and Mitsubishi climbed over 13%. South Korea's Hyundai also saw its stock rise by over 6%, while Kia had a slight increase of 0.2%.
The tariff reduction process involved an initial cut to 12.5% plus a 2.5% "most favored nation" base tariff, leading to a total of 15%. Previously, President Trump had announced a 25% tariff on all imported cars, effective from April 2. Data shows that in 2024, car exports will account for 28.3% of Japan's total exports to the U.S., a crucial component of Tokyo's economy. However, Japan's car exports to the U.S. have been hit hard, with a 26.7% year-on-year drop in June and a 24.7% decline in May.
Ed Rogers, CEO of Rogers Investment Advisors, noted that while this tariff reduction is a "significant positive" for Japanese automakers, they still face competition from Chinese and Korean companies.
